In the real estate industry, trends come and go, year in and year out. Some trends remain for quite a long time but others can fizzle out within a month or two. This is especially true in most real estate markets.
In the past year, the Golden State housing market, California property investors should know, has been lagging since buyers have not shown too much interest. However, this year, there has been a turnaround since various government agencies have made property investments easier and even more affordable.
If you are interested in investing in a home in California, below are some current local housing market trends worth knowing about:
California dominates the list of the most thriving housing markets in the USA today. The demand for Golden State real estate remained strong in May. The California metro areas accounted for half of the country’s “hottest markets.” This means that there is no better time than now to buy a home in California. You will find great yet most affordable properties to purchase in the Sacramento, San Francisco-Oakland-Hayward and San Jose-Sunnyvale-Santa Clara areas.
Buying a home is still cheaper than renting one. Over the past year, home prices grew slightly faster than rents but purchasing a property still remains the less expensive option due to low mortgage rates. According to a recent study, purchasing a home is now 35 percent cheaper than renting, an increase from 33 percent one year ago. The declining mortgage rates are just one reason why it’s becoming cheaper to own a home than to rent one today. The other reason is that home price growth overtook rent increases by just 0.2 percent over the previous year.
Home prices remain stable. There has been little to no change in home prices this year, when compared to 2014. This is due to the fact that the market is still continuing to normalize and real estate analysts are expecting an appreciation rate of no more than 7%. In general, prices usually rise and fall with interest rates, but this year could be the exception. There are some local areas that are in high demand that can see prices go up, particularly the high-end markets. However, if interest rates go up at the lower end of the market, buyers could get priced out and in order to sell, the market’s prices are likely to remain very close to last year’s prices.
Properties are still affordable. Finally, seller pricing and various local affordability programs should help investors take advantage of the new buyer’s market now. Real estate analysts do not know how long this will hold up, though, and as such, homebuyers are encouraged to take advantage of this somewhat “artificial” buyer’s market today. Investors will have to be ready to make a move; otherwise, they could lose out on these great prices.
